US Court Orders Byju Raveendran To Pay $1 Billion In Bankruptcy Case

India-West News Desk

WILMINGTON, DE – A US bankruptcy court in Delaware has entered a default judgment against Byju Raveendran, the founder of the major Indian ed-tech firm Byju’s, holding him personally liable for over $1.07 billion. The ruling comes as part of a dispute over a $1.2 billion term loan.

The judicial action was taken by Judge Brendan Shannon of the Delaware Bankruptcy Court. A default judgment is a ruling issued by a court when a litigant either fails to participate in the case or repeatedly ignores judicial mandates. In this instance, the judgment was triggered by Raveendran’s repeated failure to comply with court directives, including demands to appear and supply essential documents.

The court found that Raveendran was responsible for the movement and concealment of money from Byju’s Alpha, the company’s US-based financing subsidiary.

Byju’s Alpha, incorporated in Delaware in 2021, was established as a special-purpose vehicle (SPV) to exclusively manage a $1.2 billion term loan secured from a global lender consortium. This subsidiary served strictly as a holding entity for the loan proceeds, with no operational business of its own.

According to court filings, a significant sum of $533 million was allegedly diverted from Byju’s Alpha. The money was transferred first to Camshaft Capital, a small hedge fund operating out of Miami, and then subsequently moved through related entities like Inspilearn, before ultimately being deposited into an offshore trust. Crucially, the court found that no consideration was returned to Byju’s Alpha following these transfers.

In his defense, Byju Raveendran denied all allegations and announced his intention to appeal the  court’s decision.

The founder claimed the ruling was issued on an expedited basis, which, in his view, deprived him of the right to present a proper defense. (IANS)